What a Lender Checks Before Issuing a Broker Term Sheet in 2026

Two hours. That's our average time to a term sheet, and it's the number brokers quote back to us when a file has been sitting since Tuesday.

Both are true. The clock is real. It just doesn't start when your email lands — it starts when the file is complete enough to underwrite. A submission missing the rehab budget isn't a two-hour file.

Here's what a first pass looks like from our side of the desk, and what a broker can do in ten minutes to clear it on the first read instead of the third.

A First Pass Is Five Questions, Not a Document Request

New brokers over-send. They attach bank statements, driver's licenses and a forty-page rehab scope to a deal we can't price yet, because nobody told us the purchase price.

A term sheet does not need documents. It needs answers. Five of them.

Every item on that list is the broker's to supply. That's not work pushed downhill — it's the only reason a two-hour turn is possible. Every question we send back costs a day of trust you're spending, not us.

1. The Deal Numbers

Four figures, on one line, in the body of the email:

Purchase price. Rehab budget. After-repair value. Timeline in months.

That's the whole thing. From those four numbers an underwriter can price a fix and flip in about ninety seconds, because the ratios fall straight out of them — cost basis, loan-to-cost, after-repair loan-to-value, and whether the deal clears at all.

Two of those numbers are where files die.

The after-repair value. An ARV without comps behind it is a wish. Send two or three closed sales, with addresses, sale dates and square footage, and a one-line note on why they're comparable. If the subject is a 1,400 sq ft three-bed and your comps are 2,100 sq ft new builds, say so and adjust — the appraiser will. Our guide on how to calculate ARV is the version to send your client when their number and the market's number don't agree.

The rehab budget. "$80K rehab" is not a budget. It's a guess with a dollar sign. A line-item scope — roof, HVAC, kitchen, baths, flooring, exterior, contingency — tells an underwriter whether the number is real and sets up the draw schedule later. Ten line items is enough. Your client already has them in their head; write them down. How to estimate rehab costs walks through the categories.

For a ground-up deal, the numbers change shape. Send the lot basis, the sunk costs to date, the remaining build budget, and the completed finished value. Ground-up leverage is set against full cost — purchase plus sunk costs plus remaining budget — not against the purchase alone, and a broker who submits only the land price has understated the deal by a factor of three.

2. The Property

Address, property type, and one honest sentence on condition and occupancy.

Occupancy is the line brokers skip and underwriters look for first. A vacant single-family in rehab condition is a normal file. A tenant-occupied property where the tenant doesn't know about the sale is a different loan with different questions, and finding that out after the term sheet is signed is how a close slips a week.

Condition matters the same way. "Needs cosmetic work" and "no roof" are both rehab deals, but only one has a builder's risk conversation attached. If there's no kitchen, no working systems, or open permits, say so. Nobody loses a deal for being straight about condition. Files lose deals when the appraiser finds what the broker didn't mention.

3. The Borrower

Three inputs, and none of them require a credit pull yet:

• Completed projects. Flips, rentals, ground-up — counted separately, in the last three years. "Experienced" is not a number. "Six flips since 2023, two currently in progress" is.
• Approximate mid-FICO. A band is fine. Most programs look for 660+, the strongest tiers open at 680+, and 640–659 is case-by-case where the deal and the track record carry the file. Read what lenders actually check on credit before you guess on your client's behalf.
• Liquidity. Roughly what's in reserves after closing. Not a statement — a number.

Guessing high on credit is the single most expensive shortcut in broker submissions. A term sheet priced on a 700 that underwrites at 648 gets repriced, and your client doesn't remember that you estimated. They remember that the rate moved.

4. The Entity

Name of the LLC or corporation, state of formation, and who's signing.

These are business-purpose loans. The borrower is the entity, the property is non-owner-occupied, and the guarantor is the individual behind it. If the entity was formed last week, that's usually workable — say so up front rather than letting underwriting discover a filing date from this month. If there are partners, name them and say who controls the entity. LLC real estate loans covers the structure your client will be asked about.

5. The Exit

One sentence. Sell, or refinance and hold.

If it's a sale, we want the projected sale price and days on market — and those need to agree with the ARV you already gave us. If it's a refinance, we want the projected rent and the takeout, ideally into a 30-year DSCR loan, where pricing starts at 6.75%. The refinance exit is the one brokers under-document, and it's the one that turns a single closing into two.

An exit that doesn't survive arithmetic is the fastest no we issue. If the projected sale price minus the loan payoff minus closing costs minus holding costs leaves your client negative, we're going to see it, and a good lender says so before the term sheet, not after the appraisal.

The Four Things That Send a File Back

Across broker submissions, the same four items account for most first-pass returns. All four are free to fix. None of them require a document.

1. An ARV with no comps. Attach two or three. Closed sales, not listings.
2. A rehab budget as one round number. Break it into line items.
3. An exit that doesn't clear. Run the arithmetic before you send it.
4. "Experienced borrower" with no count. Write the number of completed projects.

The market is not forgiving of a slow file right now. ATTOM's Q1 2026 home flipping report, published June 18, 2026, found 61.1% of flips were all-cash purchases, with a typical gross profit of $66,000 on a 165-day hold. Your financed client is bidding against cash on speed and certainty — a term sheet in hand is the equalizer, and a file that clears first pass is how they get one.

Cost pressure is doing the rest. In the Summer 2026 RCN Capital/CJ Patrick Investor Sentiment Survey, released August 5, 2026, nearly 55% of investors named financing costs one of their biggest problems, and 71% said insurance was a factor in their investment decisions, with 50% reporting they had missed a deal over insurance concerns. Insurance is a post-term-sheet condition, not a first-pass item — but if your client is buying in a coastal market, raise it early. Our guide to investment property insurance requirements is the one to forward before they're under contract, not after.

What You Get Back — and What It Isn't

A term sheet is a priced, conditioned offer built on the numbers you gave us. It's what your client uses to make an offer, win a contract, or beat a cash bid on certainty.

It is not an approval. Appraisal, title, insurance and full underwriting come next, and each one can move terms. Terms are subject to underwriting, appraisal, title, and insurance. Rates are ranges, not promises — fix and flip pricing starts at 8.75% and where a file lands depends on leverage, experience and the deal itself.

Read it before you forward it. How to read a hard money term sheet breaks down which lines are fixed, which are conditions, and which are worth a phone call — and broker commission structure covers how your fee is disclosed and paid.

The Ten-Minute Version

Before you hit send, the email should contain:

• Purchase price, rehab budget, ARV, timeline
• Two or three closed comps with addresses and dates
• Address, property type, condition, occupancy
• Completed projects, approximate mid-FICO, reserves
• Entity name, state, guarantor
• Exit in one sentence

Six lines. Ten minutes with your client on the phone. That's the difference between a two-hour term sheet and a three-day one — and your client only ever sees the elapsed time.

Once the term sheet is signed, the document package starts — the hard money loan document checklist is what to send your client that same day, so conditions and the closing file move in parallel instead of in sequence. That's also how a 5–10 business day close actually happens.

Send Us the First One

New to submitting? Send the deal and call. We'll tell you what's missing on the phone instead of in a reply-all three days later, and you'll never have to ask twice.

Fix and flip loans from 8.75%. DSCR loans from 6.75%. New construction at 85% of full cost — purchase plus sunk costs plus remaining budget — rising to 90% for builders with 20 or more completed ground-up builds, with a further 5% of cost available on top of either to finance the interest reserve. After-repair loan-to-value is a second cap, and the lower of the two governs.

Term sheet in about 2 hours on average. Close in 5–10 business days. Lending in 45 states — nationwide except VT, UT, OR, SD and ND.

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Or call us directly: (305) 857-5620 | processing@fundedcapital.com

Not sure how a deal prices before you submit it? Run it through the calculator, or read how to become a hard money broker for the full picture on building this into a revenue line.